Moroccan American Trade & Investment Center (MATIC), by Jean AbiNader and Sydney Upchurch (Washington, DC, April 25, 2012) —In this second in a MATIC series looking at the role of economic growth issues facing Morocco, we review the party platforms published in advance of the November 2011 elections to describe the economy as a dominate theme in the elections.

Despite the overwhelming approval of Morocco’s new constitution in July 2011 referendum, some demonstrations persisted into that fall. The focus of many of the protestors was a call for greater economic opportunities, transparency in decision-making, and jobs for the unemployed. As parliamentary elections drew nearer, these criticisms were taken up by many of the major political parties which sought to incorporate them into their own electoral campaigns.

The two political frontrunners—Istiqlal and the Justice and Development Party (PJD)—promised to take actions to reduce wealth disparity, create jobs, promote transparency, and boost development. Both parties guaranteed economic reforms focusing on unemployment, tax reform, international trade and investment, and poverty reduction. They also listed education and legal reforms as part of their economic growth strategies.

The PJD set an ambitious seven percent annual economic growth rate as its target, while Istiqlal committed to five percent, a figure consistent with the average rate from 2007 – 2011. The PJD vowed to reduce overall unemployment by two percent, which would require creation of over 200,000 jobs. Both parties promised to take actions to lower the youth unemployment rate, which had reached nearly 30 percent in the fall of 2011.

Both parties mentioned expanding The Compensation Fund, a social safety net financed by both the State and private enterprises that is primarily aimed at financing medical care and promoting education for children from poor families. Istiqlal emphasized the importance of the fund, but suggested adjusting its support base in order to minimize its impact on the budget deficit.

Both parties also promised to improve standards of living and support for the middle class. Istiqlal vowed to fund professional schools (vocational training) and close the gap in social inequalities by improving job focused education. The PJD pledged to increase the monthly minimum wage by over 25 percent, to approximately $370.

In an effort to encourage foreign and domestic investment, the PJD committed to reducing the company tax from 30 percent to 25 percent, and to cut the value added tax (VAT) from 20 to 15 percent. Abdelilah Benkirane reaffirmed his party’s commitment to encouraging international trade and investment after being sworn in as Prime Minister. “This new government has a true will for reform and we will keep all the promises we made. We will do everything to encourage foreign and domestic investment to create a climate of prosperity.”

The victory of the PJD, which captured the largest number of votes, was interpreted both as a validation of their hard work and detailed reform and growth programs as well as a repudiation of the traditional parties whose past performance did not inspire those supporting broader and continuing reforms.

With a new constitution and strong popular mandate to promote economic growth in all sectors and at all levels, the new government began drafting its program, which was presented to the Parliament for approval in early April. Our next segment will take a look inside the new budget and weigh opportunities for stimulating stronger economic performance in light of weakening European markets and projected low agricultural yields.

Jean AbiNader is Executive Director at the Moroccan American Trade & Investment Center (MATIC); Sydney Upchurch is a Researcher at the Moroccan American Center